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Moving oil by rail to expand despite public concerns

January 26, 2014 - 9:07am

CTV reports, "In the wake of last year’s Lac-Megantic disaster and other recent rail tanker explosions, a new poll conducted by Ipsos Reid for CTV News (has) found that 54 per cent of people surveyed said they have no faith in the safety of transporting flammable materials by rail. ...According to the poll, an overwhelming majority of 90 per cent agree the federal government should conduct a formal review of Canada’s rail policies around transporting crude oil by rail."

And yet the transport of oil by rail in Canada has dramatically increased to about 175,000 barrels per day, new oil-loading terminals slated for construction could facilitate the movement of 900,000 bpd by rail (surpassing the Keystone XL pipeline), railways face no regulatory hurdles in carrying more and more oil by rail, while the International Energy Agency has found the risk of a rail spill is six times as high as the risk of a pipeline spill.

1. What is the current situation?

Earlier this month, the Globe and Mailreported, "In 2011, around 68,000 carloads of fuel oils and crude petroleum moved along Canadian rail lines, according to Statistics Canada. In 2012, that rose to nearly 113,000. Between January and September of 2013 — the most recent data available — some 118,000 carloads had been shipped via rail." In October 2012, the Canadian Press reported, "Canadian Pacific moved some 8.3 million barrels of crude oil in 2011, and expects to hit 44.8 million barrels next year... (And) CN moved some 3.2 million barrels of crude in 2011, and is expected to hit 19.2 million barrels by the end of this year." In today's news report, CTV adds, "There are an estimated 50,000 tankers rolling down the tracks in Canada that need to be replaced or at least retrofitted."

2. A major expansion of oil by rail?

Last week, Corporate Knights reported, "Alberta producers are now looking to railways to solve their transportation problems. Three oil-loading terminals are slated for construction in western Canada. All told, the proposed new rail terminals across the country could facilitate as much as 900,000 barrels a day oil oil moved across Canada by railcars. To put that number in perspective, it's a larger flow of oil than even the yet to be approved Keystone XL pipeline would carry."

In October 2012, Maclean's magazine noted, "One oil ﬁrm, Calgary’s Gibson Energy Inc., recently expressed interest in building a train loading facility near Hardisty, Alta.—a key departure point for crude from the oilsands. It would allow the company to bypass the pipeline bottleneck at the oil hub in Cushing, Okla., and move up to 60,000 barrels of oil per day to markets across North America." And the Globe and Mail has also noted, "Korea National Oil Corp.’s Canadian company, Harvest Operations Corp., is examining whether it could rail Alberta oil to the east coast and then send it on barges to its refinery in Come By Chance, Nfld., which has struggled with the cost of the Atlantic-sourced crude it now uses."

3. Where is the Harper government on this?

CTV reports, "This week, the Transportation Safety Board called for sturdier rail cars to be build. The government says it’s considering those recommendations along with some of its own to improve the design of the tankers, but the opposition is demanding a more immediate response." More significantly, the Canadian Press has reported, "In response to growing opposition to applications by Enbridge and Kinder Morgan to construct pipelines ... a (February 8, 2012) briefing note for the prime minister (says Transport Canada confirms) rail companies face no regulatory hurdles for hauling western Canadian crude oil to markets."

4. What does the public say?

CTV reports, "The poll showed the majority of Canadians (69 per cent) believe that pipelines are the best way to ship crude oil from one place to another, compared to 18 per cent who prefer rail and 13 per cent who prefer transferring crude oil by way of trucks." This should not be read as an endorsement of pipelines, but rather an observation on comparative safety. But even on this issue, the Huffington Post has noted, "Pipelines spill three times as much oil over comparative distances as rail, the International Energy Agency (IEA) says. ...The IEA found the risk of a rail spill is six times as high as the risk of a pipeline spill, but pipelines simply spill more when they rupture. ...The study backs up research from the American Association of Railroads, released last month, which found that rail transport spills 0.38 gallons of oil per million barrels moved, compared to 0.88 gallons for pipelines."

Whether oil is moved by rail or pipeline, it poses threats to the communities and watersheds where it is extracted, transported by, and consumed. We must transition to renewable energy sources before the amount of carbon dioxide emitted into the atmosphere causes catastrophic climate change. Just this past June, the chief economist at the International Energy Agency said that about two-thirds of all proven reserves of oil, gas and coal must be left in the ground in order to limit the rise in average global temperature to 2-degrees-Celsius, a threshold that scientists say cannot be crossed. The year we'll likely hit that emission limit could be as soon as 2017.